Cotton industry support urged

Even though U.S. cotton is confronted with “challenging times,” particularly for gins and others in cotton’s infrastructure, “our industry must maintain these programs and keep them strong if U.S. cotton is to survive,” says Larry McClendon.

Speaking at the summer meeting of the Southern Cotton Ginners Association at Branson, Mo., the Marianna, Ark., producer/ginner urged association members to give the National Cotton Council “your full financial support and leadership in order to maintain a strong organization that can continue its work on behalf of all segments of the cotton industry.”

The Council is “the only national organization that represents the interests of the U.S. raw cotton industry,” said McClendon, who served as chairman of the Council in 2008, “and although finding a consensus between all segments of the industry can sometimes be difficult and frustrating, the Council has a remarkable rate of success” in providing leadership on issues critical to cotton.

“We need everyone’s support to maintain a strong organization that will be able to continue its work in Washington on the farm bill and on important appropriations measures, in Geneva on World Trade Organization issues, and in foreign markets to find a home for over 75 percent of our production that now goes to exports.”

Among key issues in which the Council is active, McClendon said, is the 2008 farm bill.

“There is still a lot of work to be done on finalizing the rules for this bill and the Council is working hard to insure it is implemented according to the intent of Congress.

“There have already been challenges to the farm bill during this year’s congressional budget debate, including President Obama’s proposed budget that would phase out direct payments over three years for many growers, eliminate storage credits, and reduce payment limits to $250,000. He also wants to cut the Market Access Program, which is of vital importance to cotton and many other crops in promoting our products in overseas markets.”

The Council has been involved in a number of activities with the Budget and Appropriations Committee to insure that the farm bill remains intact, McClendon said. “Fortunately, to date, Congress has rejected calls for changes in the legislation.”

After two years of debate and working to overcome two presidential vetoes, he noted, the Council played a key role in crafting a farm bill that contains almost of the cotton provisions from the previous legislation.

“This includes our marketing loan, which was enhanced with additional competitiveness features; no limits on marketing loan gains and LDPs; retention of 98.5 percent of our target price; maintaining storage credits; and the inclusion of an economic assistance program for domestic textile mills.”

From a producer perspective, the Council is usually judged by the outcome of each farm bill, McClendon said. “But, while farm bills are never 100 percent, without the Council we would have received much less in the most recent bill.

“In Washington, you’re either at the table or on the table. If you’re on the table, you will be sliced and diced. The Council is the vehicle that keeps the U.S. cotton industry at the table.”

In addition to leadership in farm bill legislation and price support, an ever-increasing commitment of the council is directed to regulatory, environmental and trade issues, he said.

“Having an active presence in the WTO agricultural negotiations in Geneva is of critical importance. The Council was in Geneva during the last WTO ministerial, when significant cuts in domestic support were being proposed and no real gains in market access would be realized. Council leaders pushed successfully for the U.S. negotiators not to agree to a bad deal, and thankfully, those negotiations ended with no agreement.”

The WTO negotiations will resume sometime later this year, and he said, “The Council will be there again, representing the interests of U.S. cotton.”

The Council also is continuing to monitor developments in the Brazil WTO case and is developing strategy for the expected announcement of an arbitration award and the unwanted attention that will bring to our program, McClendon said.

“One of the more important jobs of the Council each year is to make sure important cotton programs receive adequate funding in the federal appropriations process. An outstanding example has been the council’s work to maintain the federal cost-share funding for the boll weevil eradication program.”

Mississippi recently announced that eradication has been achieved in that state, and other Cotton Belt states have either already achieved eradication or are well on the way to eliminating a pest that has cost the industry an estimated $15 billion in lost production and control expenses.

The Council is also working for federal funding for many other important programs, McClendon said, including funding for the Market Access Program and federal research programs such as those conducted by the cotton ginning laboratories.

Among key issues in Washington now, he noted, are those dealing with the environment.

“One of the hottest topics is climate change legislation. The Council is working closely with other agricultural organizations to caution Congress about the impact of this legislation on the cost of production. Even though the Council supported the agricultural amendments to the House bill, we issued a statement saying we could not support the legislation because of the higher costs to all cotton industry segments and the competitive disadvantage we would face in international markets.

“Make no mistake — climate change legislation comes with costs, and we, as producers, will pay.”

A recent court decision could ultimately require producers to have permits to apply crop protection products, McClendon said, and “the Council is directly involved in seeking to overturn this ruling.

And he noted, other legislation is being introduced that would greatly expand the definition of “navigable waters” to “all waters” of the U.S. with regard to application of the Clean Water Act.

The Council’s overseas arm, Cotton Council International, is continuing to play a critical role in promoting and developing new markets for U.S. cotton

“CCI is a tremendous success story with their current programs,” McClendon said, “and their work will become even more important as our industry becomes more dependent on export markets”

“To put this in perspective, in 1997 U.S. textile mills consumed 11.3 million bales and 7.5 million bales were exported; in 2008, U.S. textile mills used just 3.9 million bales and 11.5 million bales went into the export market.

“Keep in mind that we’re competing for these foreign markets with other cotton-producing countries, so it is of critical importance that CCI is able to continue its work to build foreign markets and insure that U.S. cotton remains the fiber of preference in those markets.”

In spite of a reduction in government support for U.S. cotton, other nations including China, India and Brazil have expanded support for their cotton within the past year, McClendon noted, “but they are not on the radar because of their developing nation status.”

Overall, McClendon said, gins “provide excellent support for the Council, and we consider our membership not just a necessary expense, but more importantly, a wise investment for our future.”